Northern Ireland’s poorest families fall behind rest of UK after dramatic drop in income

25th Mar 2014

The poorest families in Northern Ireland have suffered a dramatic fall in their income following the economic downturn, deteriorating at a markedly worse rate than the rest of UK, new research published today has found.

The report, written by the New Policy Institute (NPI) for the Joseph Rowntree Foundation (JRF), reveals the latest data showing the extent and nature of poverty in Northern Ireland.

Its headline finding is a pronounced fall in income for families across the social spectrum, with the poorest seeing the largest falls. After inflation, incomes for the poorest fifth fell by 16% (£39 a week lower) - compared to 5% in the rest of the UK on average – between 2006/07 and 2011/12 (the latest available data). Average households saw their incomes fall by 9% over the same period.

The report authors say the decline is due to rising unemployment and a greater share of workers working part time.

Household incomes, poverty rates and the labour market have all worsened in Northern Ireland in the last five years - in each case, this deterioration has been greater than in Great Britain (GB).

Overall, almost 400,000 people live in poverty in Northern Ireland. The report also found that over the last five years:

  • Poverty has risen for working age adults and children, but fallen for pensioners. The number of adults under 30 in poverty rose by 50% in five years.
  • The proportion of unemployed working age people has almost doubled to reach 6%.
  • The number working part-time but wanting full-time work has reached 51,000, or 4.4% of the working-age population, compared to 3.5% with the rest of GB.
  • There are now 27,000 more part-time workers than in 2007 and 3,000 fewer full-time workers.
  • The number of households where the main breadwinner is working part-time rose 30 per cent.

Julia Unwin, Chief Executive of JRF, said: “This report reveals a series of worrying trends for Northern Ireland, with declining incomes and job prospects leading to rising poverty. These findings are a wakeup call for governments in Stormont and Westminster: we need a comprehensive strategy to reduce poverty for people in Northern Ireland. This means tackling the underlying causes of poverty, such as the number and quality of jobs on offer.”

With welfare reform changes on the horizon, the report also found:

  • The under-occupation penalty – the so-called bedroom tax – will have a much greater impact in NI than GB, affecting 53 per cent of claimants compared with 23 per cent in the rest of GB.
  • The move from Disability Living Allowance (DLA) to the Personal Independence Payment (PIP) will also have particular significance for NI, with almost twice the proportion claiming DLA compared with the rest of GB.
  • Around a quarter of those reassessed for PIP are expected to lose their entitlement altogether, with a further third receiving a lower entitlement.

Tom MacInnes, Research Director at NPI and co-author of the report, said: “The recession and its aftermath hit Northern Ireland harder than the rest of the UK. In particular, the rise in unemployment and part time work has hurt family incomes across the board, but the poorest have fared worst. Possibly most worrying is the big rise in poverty among the under 30s.

“With welfare reform on the horizon, already diminished incomes may decline even further. Reforms that cut the incomes of those supported by benefits or that require more people to actively seek work – without improvements in the quality of jobs on offer – are likely to exacerbate problems further.”